Rubio and Witkoff will not attend talks in London after Ukraine rejects parts of the Ceasefire Proposal (giving Crimea to Russia). Ex General Kellog will go instead.
Putin will be delighted. Zelensky can now be framed as the reason why the Cease Fire Proposal failed, even though Putin would never have agreed to it anyway. This will play into President Trump’s dislike of Ukraine and Zelensky.
From the Russian perspective this will help achieve one of two goals. Either the war goes on & the US increases its tacit support for Putin. Or President Trump ups stumps and quits the scene (“it’s not our war”), leaving Russia free to pursue its goals in Ukraine before Europe is ready to fill the military gap created by a US withdrawal.
Either way it will have 2 consequences for investors:
- The Europeans cannot abandon Ukraine (& were opposed to Crimea being recognised as Russian by the US). So the US - European split will widen and worsen.
- The process of European -US divorce will accelerate if the US withdraws completely. This could even endanger NATO.
Escalation seems inevitable.